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Radius Health: Earnings Update Strengthens Long-Term Thesis


  • The stock reacted weakly to Q4 earnings.
  • I provide a recap of the bullish thesis.
  • TYMLOS launch continues to progress well, and the patch opportunity appears underappreciated.
  • Elacestrant provides high optionality and could create much value for shareholders. However, a potentially pivotal study won't get underway until the second half of the year.
  • While not a ROTY idea (near-term upside), the stock has significant long-term potential and could be added to the Core Biotech model portfolio.

Shares of Radius Health (NASDAQ:RDUS) have dipped significantly since its Q4 earnings report was released.

Figure 1: RDUS daily advanced chart (Source: Finviz Elite) (Disclosure: Contains affiliate link)

In my original article, I noted that my bullish stance was a result of significant insider buying, progress for the launch of TYMLOS (reimbursement, longer-term data, regulatory catalysts, potential partnerships) and encouraging results for RAD1901 (elacestrant) in heavily pretreated ER+ breast cancer patients. A $300 million convertible offering also extended its operational runway significantly.

In my update piece from late January (accessible with ROTY subscription or SA PRO), I noted that insiders were continuing to buy and results for elacestrant continued to impress (ORR exceeding rates for approved endocrine agents in second and third line ER+ breast cancer) while addressing a large market opportunity as a monotherapy or in all oral combinations. A CHMP opinion for TYMLOS was in sight, and I reminded readers to keep a close eye on quarterly updates as the launch unfolds.

There were a few highlights from its fourth-quarter report that I believe strengthen the bullish case or at least prove it continues to play out in the right direction.

The TYMLOS launch continues to progress well (quarterly sales totaled $7.7 million in its second full quarter of generating revenue). Reimbursement and coverage trends are favorable (259 million covered lives, 93% coverage in commercial plans, Medicare Part D coverage increased to 41%). Market share has risen to 32% of new patients starting anabolic therapy and 13% of total prescriptions.

Figure 2: Promising trends in market share growth (Source: Q4 slides)

A labeling supplement was also submitted to the FDA which included data from the ACTIVExtend trial. An agreement was reached with the FDA for a clinical study in men with osteoporosis that will begin enrolling patients in the

This article was written by

Jonathan Faison profile picture

Jonathan Faison is a biotech investor with over 15 years of biotech investing experience.

He leads the investing group ROTY Biotech Community, a community of 400+ experienced biotech investors, profitable traders, industry veterans and novices. Members receive access to model portfolios, high conviction ideas and a very active, helpful Live Chat. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (10)

What do you think about it now? 17$?
Jonathan Faison profile picture
This one was sold from the Core Biotech series (now discontinued) for about a 10% loss or so given uncertainties with generic competition and other risk factors. Continuing to stay on the sidelines
Retired Bureaucrat profile picture
I have a large position, but the slow sales is worrisome, particularly when generics for Forteo will hit the market soon.
Jonathan Faison profile picture
Agree that is a factor to keep a close eye on and key point to the bear thesis
UpJumpedTrader77 profile picture
Thanks for the confirmation Mr. Faison... Will be looking to enter $RDUS come Monday...
Jonathan Faison profile picture
Appreciate you reading
Thanks for
The article. Agree with it
Jonathan Faison profile picture
Glad to know I´m in good company- cheers.
WiseGuyInvestin profile picture
Yeah I agree in long run could do very well but the problem today is not enough sales for huge expenses and will need to do another offering at this pace. Maybe if another company sees this they could make a deal to buy the company but I think partnerships and getting products through pipeline quickly is how near term upside will come into play. Just painful if you’ve been a shareholder for last 3 years, understandable people want to throw in towel instead of waiting for long term payoff
Jonathan Faison profile picture
Agree near term pain/long term opportunity- buyout would be nice but would hopefully be a substantial premium to make it worth it
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